In federal court Minneapolis, MN Denny Hecker, a one-time mover/shaker and auto dealer empire Mogul in the twin cities was sentenced to 10 years in prison on 2/11/11 for bankruptcy fraud and conspiracy to commit wire fraud. The sentencing judge threw the book at him sentencing him to the maximum called for under the guidelines telling Hecker that he did not deserve a break and called him a scoundrel. Harsh words and a harsh sentence. Bad for Hecker no doubt but others can benefit from his experience. I’m hoping that his outcome will serve as a deterrent for anybody coming into the bankruptcy process with less than a full commitment to total disclosure and candor with the court as well as with their attorney. Lately whenever I’ve got someone consulting with me about a bankruptcy case and they either outright come out and ask me how to “game” the system or I get the sense that they aren’t being totally candid with me I’ve pulled out the example of Mr. Hecker as good reason for being “honor bright” and truthful with all things in regard to their bankruptcy filing. It isn’t worth it to try and hoodwink the court. You can lose your discharge as Mr. Hecker did…plus he still has to pay all the debt and he’s spending the next decade in federal prison. That’s not a typical result but he’s an example that people can and actually do go to jail for bankruptcy fraud. It appears that he was his own worst enemy as he couldn’t process the fact that he wasn’t fooling anyone anymore. That failure and his continued contempt for the bankruptcy process led to the harshness of his sentence. Word to the wise…full disclosure and play by the rules. There are many benefits in bankruptcy for debtors but some stiff penalties for dishonest debtors. For my own practice…if I get the sense that someone isn’t coming completely clean with me about their circumstances I give them a pass. I don’t want their case and I won’t be involved in it. There are too many other honest people out there who need my help.
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